"If we want to break the cycle of poverty, let's educate kids so they can be able to escape poverty," said Deal.

The governor says the solution to the failing system is not adding more money, but rather changing the Quality Basic Education Funding formula that decides how much state money is sent to local districts.

Deal said the formula was set in the 1980s.

"This model is older than every student in our classroom, and some of their parents," said Deal

"The question will always arise, 'How will you spend the money? Will we reduce classroom sizes?,'" said State Senator David Lucas.

Lucas says there'll be much debate in the assembly as to what will change, but agrees using a formula from the past to prepare kids for the future, is inadequate.

Deal also urged lawmakers to come up with a plan this year to fund improvements for the state's transportation system.

He said the issue is vital to Georgia's economy, and that the state needs to find an estimated $1 billion.

Deal also urged lawmakers to come up with a plan this year to fund improvements for the state's transportation system.

Medical cannabis and Georgia's roadways were two other topics Deal discussed.

He said the roadway issue is vital to Georgia's economy and that the state needs to find an estimated $1 billion.

He did not make any suggestions on where to find that money.

However, he did speak about the need for change in excise taxes, the per gallon flat fee charged at the gas pump.

"The fuel efficiency for the average vehicle has almost doubled, which means that excise tax for each vehicle driven has roughly been cut in half," said Deal.

Deal also told the assembly the rate of repaving roads in Georgia is too slow. He spoke about the improvements to the major express ways in Atlanta.

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The full text of Deal's State of the State address:

Lt. Governor Cagle, Speaker Ralston, President Pro Tem Shafer, Speaker Pro Tem Jones, members of the General Assembly, constitutional officers, members of the judiciary, members of the consular corps, my fellow Georgians:

Today marks the fifth year that I have reported to you, the people's representatives, on the state of our state. This is our annual checkup exam on the body politic, where we measure our vitals, celebrate areas of great health and seek cures for what ails us. In each succeeding year, we've seen the green shoots of our economy grow a little taller. Each year, we've seen more Georgians return to work or get their first job. Each year, we've seen hundreds of more businesses open or relocate here. Each year, steady revenue growth has allowed us to slowly mend the ravages wrought by the Great Recession. Now, our economy is seeing positive growth with thousands of new jobs added every month. We're seeing the tell-tale signs of cranes and bulldozers humming on newly cleared land. We're seeing home values recover and Georgia families rebuild their savings. And Georgia has been named the No. 1 place in the nation in which to do business by several major rating agencies and has repeated that designation by one of them already. In short, I'm here to report to you today that the state of our state is strong, and getting stronger every day.

But for every milestone we reach, for every victory we attain, for every improvement we achieve, new challenges await. Certainly, there are those who focus only on the negative, zeroed in on areas where we should do better. They downplay any progress as "not good enough." To them I say: Celebrating our progress puts our challenges in perspective and reminds us that together we can achieve greatness. Our shortcomings don't go unacknowledged. They're simply what we're going to address next.

When focused only on the negative, the job before us can seem overwhelming. These feelings are not new to our generation. Atop President Kennedy's desk sat a fisherman's prayer: "Oh, God, Thy sea is so great and my boat is so small." When confronting the challenges of 10 million people – challenges that can appear insurmountable – it's easy to feel that the tools we've been given aren't up to the task.

When it comes to our constituents' needs in education, health care, transportation and public safety, the sea seems so great and our boat so small. We may have 10 million challenges, but we also have 10 million oars.

In the turbulent waters of recession and recovery, we have rowed steadily forward. The synchronized beat of unified oars has reset the rhythm of our economy. Georgians have spoken clearly that the conservative principles, which have guided our decisions, the very ones that have brought us out of the recession, must continue to guide our future growth. These include keeping our government small, prioritizing and balancing our budget, and emphasizing a strong business climate.

State government cannot address the legitimate needs of our citizens without adequate revenue. Last year we based our budget on an anticipated revenue growth of 3.4 percent. That was in keeping with our pattern of conservative budgeting. So when fiscal year 2014 ended, our actual revenue was 4.8 percent. That differential between what we spent and what we collected is deposited into our Rainy Day Fund. Every budget cycle since I have been governor we have added to that fund so that it has increased by 643 percent since I took office.

Annual revenue growth, coupled with conservative spending and a growing Rainy Day Fund are positive evidence that Georgia is better today than it was last year.

Since I took office, over 319,000 new private sector jobs have been created in Georgia with nearly 93,000 of those coming in the past twelve months. The announcement last week that Mercedes-Benz USA is moving its North American headquarters to Georgia is further evidence that our state will continue to be a leader in job creation. With job growth comes population growth. Georgia is now the eighth most populous state in the nation, moving from the number 10 position in just four years. People don't move to a state unless it provides them with opportunities. The Mercedes slogan is "the Best or Nothing." The company that accepts nothing but the best chose Georgia… I'll take that. And in the near future, Porsche North America will open their headquarters near the Atlanta airport.

But let's not forget our first major automotive manufacturer in modern times, Kia, which employs some 3,000 Georgians and whose supplier base continues to expand in our state. Kia's example told the world that we have the quality workforce and business environment needed to thrive in the automotive industry. Kia officials remind me often that their West Point Georgia plant produces the highest quality vehicle in their worldwide chain.

Furthermore, home prices are up in the past year and up significantly since 2011, an example of the resurgence of this sector and confidence in the market. Construction, manufacturing and other key Georgia industries continue to rebound. And as Georgians experience growth in their incomes, this leaves more money for the types of things our fellow citizens want to be doing, rather than just the essentials.

Virtually every reliable indicator points to one thing, a growing economy. And to those of you who have been paying attention, you will notice that the unemployment rate, the prodigal son of indicators, is even falling back in line. For those who were too long unemployed or underemployed, for their relatives who watched them struggle to get hired, and for the Georgians who understand that a working economy is an economy in which people work, we are making a difference. The ocean of need is vast, but shrinking, and we will continue to close the distance between where we are and where we wish to be.

Still, need does exist. Over 19,000 students dropped out between grades nine and 12 over the past school year. That is far too many. Neither Georgia nor these young people can afford the disparaging effects that typically result when someone leaves high school prematurely. This is why over the next few years we intend to take a comprehensive look at how we can make K-12 education more accessible and more effective. A child that does not graduate from high school is that much less prepared for the workforce, that much less prepared for college and that much more prepared for a life behind bars.

I am establishing an Education Reform Commission to study a number of questions regarding our education system, such as increasing access to Georgia's world class early learning programs, recruiting and retaining high quality teachers in our classrooms, and expanding school options for Georgia's families. This group, which will be composed of legislators, educators and a variety of other stakeholders, will recommend potential improvements to me by August 1 of this year. I fully anticipate this process to be as successful as the one involving our justice reforms after which it was modeled.

In addition, a subset of this group will examine the most appropriate ways to modernize our QBE funding formula from the 1980s. This model is older than every student in our classrooms and some of their parents. Just as most of us wouldn't dress our children in parachute pants and jelly shoes and we wouldn't teach them about computers on a Commodore 64, neither should we educate them under a 1980s funding formula. Our students are now using iPads and Androids. Why tie them to a desk when technology can take them to the moon and back?

This undertaking will require detailed work. My vision is to create a formula driven by student need that provides local school and district leaders with real control and flexibility. It is our hope that funding changes based on the commission's recommendations will go into effect as early as the 2016-2017 school year.

While we must certainly address the outdated funding formula, education still remains a top priority in our budgets. This year's budget coupled with my proposal for next year's budget represents an infusion of over one billion additional dollars for K-12 education. Working together, we have devoted the largest percentage of the state budget to K-12 education of any governor and General Assembly in the last 50 years. Now, the focus is on turning those dollars into academic progress. I look forward to working with all of you to accomplish that goal.

However, no matter how well we fund education, the fact of the matter is that far too many students are trapped in a failing Georgia school. Roughly 23 percent of schools have received either a D or an F, which constitutes a failing grade, for the past three consecutive years. When the system fails, our children have little chance of succeeding.

New options can enrich lives, brighten futures and rekindle hope. Three years ago, the legislators here called for and the voters of this state overwhelmingly approved the charter school amendment. I have good news: It's making a positive difference. This year, I am asking you to continue the trend of restoring hope and opportunity to areas of our state that could use a helping hand.

I am proposing a constitutional amendment to establish an Opportunity School District. It would authorize the state to step in to help rejuvenate failing public schools and rescue children languishing in them. This model has already been used successfully in other states. My office has been in contact with a student from New Orleans, who tells us he could not read until he was 12. Now, because of the Recovery School District in New Orleans, Troy Simon is going to Bard College in New York, where he intends to earn a degree in American Literature. His life has changed. There is perhaps no sweeter irony – the young man who couldn't read at all may one day teach others to read, and read well.

There are many excuses that will be offered for why schools are failing— the students come from families in poverty, their parents are dysfunctional, they don't care because they have no hope.

Let's stop making excuses— If we want to break the cycle of poverty, let's educate those children so that they have the skills to escape poverty, if we want to interrupt the cycle of dysfunctional families, let's educate the children in those homes so that their families of the future will return to normalcy; if we want our young people to have hope, let's give them the greatest beacon of hope we can confer on them— a quality education that leads to a good job, a stable family and the stairway to the future.

There will be those who will argue that the problem of failing schools can be solved by spending more money. They ignore the fact that many of our failing schools already spend far more money per child than the state average. The problem is not money. More money without fundamental changes in the delivery system will not alter the results; it will only make state and local taxpayers greater enablers of chronic failure.

If we take this step, more students will be able to gain employment or go to college when they graduate, more employers will be satisfied with our state's workforce, and more of their colleagues might just decide to locate in our state. Above all, students and parents will relinquish the burden of having nowhere to go to get a proper education, something no family should have to experience in the first place.

Liberals cannot defend leaving a child trapped in a failing school that sentences them to a life in poverty. Conservatives like me cannot argue that each child in Georgia already has the same opportunity to succeed and compete on his or her own merits. We have a moral duty to help these children who can't help themselves. The sea is great and the boat is small, but the boat must not have first and second class seating.

I am calling on you to do your part this session to get this referendum on the ballot so that Georgians can assure that a child's hopes of success aren't determined by his or her ZIP Code. Our places of learning should be where a child learns triumph, not defeat.

We have experienced triumphs in our criminal justice system, where we have tamed some rough seas. Working with those of you here and others throughout this state, we have enhanced safety and nurtured second chances. We have combined taxpayer savings with personal salvation. In return, our reforms are closing the revolving door that has led too many Georgians back into our prison system. Crime may not pay, but stopping it does.

I have already shared with you just last month and in the Inaugural address the promising results of some of our efforts. My budget this year will reflect our commitment to these important reforms. The next step we are taking to improve our delivery of justice will further make Georgia a leader in this area.

On many occasions, one troubled family or neighborhood will deal with multiple agencies, from Pardons and Parole to DFCS to the Department of Juvenile Justice to the Department of Corrections. Under current policy, these agencies often don't coordinate effectively on these cases. This fails to bring a holistic approach to the needs at hand, and it doesn't deliver services efficiently.

For this reason, I am proposing to create the Department of Community Supervision to eliminate redundancy and enhance communication between these related groups. This new agency will pull from the relevant existing portions of Corrections, Juvenile Justice and Pardons and Paroles. While the Division of Family and Children Services will not contribute to the agency itself, we will be including the Director of DFCS on the Board of Community Supervision to facilitate the transfer of appropriate information.

Recently we have seen tremendous growth in the number of child welfare investigations, due in part to our 24-hour call center. This is why we will continue to fund additional resources to meet this unfortunate need, including support for 278 additional caseworkers.

In addition, the Child Welfare Reform Council, which I created in 2014, has released its review of the Division of Family and Children's Services. To address some of their recommendations, I am proposing in my budget this year that we fund several upgrades. These include beginning a mentor program for supervisors, providing for greater career and salary growth potential, promoting the safety and resources available to caseworkers, and improving the recruitment and training of foster parents. By caring for our caseworkers, we can better care for our children in need. I am happy to say the Council will continue its work in the upcoming year.

One of our most vulnerable populations is our children who are suffering from seizures. Last year, we set in motion trials at our state medical school to test the possibility of using cannabis oil to treat severe seizures of those young people in a safe and nonintoxicating way. Those trials involving Georgia's children have already begun and will continue to expand.

This year I hope to sign legislation to decriminalize cannabis oil in Georgia so that families who need it and who obtain it legally will not be prosecuted for possession of it. Let me be clear, I do not support the legalization of marijuana for recreational purposes. We're focused narrowly on an oil that contains fractional amounts of THC – the chemical in marijuana that intoxicates a user. We want to find a pathway to bring our children home from Colorado without becoming Colorado.

We still face the significant – and more complicated – issue of access. That's why, in addition to decriminalization, I'm proposing a study committee to research a proper role for the state of Georgia in the ongoing debates about the types of medical conditions that can benefit from this product, and how we can best address this in a logical and controlled manner. I know, for many families, time is of the essence. I want us to answer the question of access as quickly as we possibly can while going through the proper steps to ensure safety and compliance with federal laws. There's broad agreement we must do something and that we can do something. Let's also agree that we must do it right.

Even a small boat conquering the sea must dock every once in a while. We must therefore ensure that our network of bridges, roads and other vital infrastructure are well maintained and that the increasing transportation needs of our population are met. So, let me present to you our options.

Since only three regions in the state invested in Plan A, a regional one-percent sales tax for designated infrastructure projects, we acted to implement Plan B, which includes reprioritized funding and a focus on the most essential projects that will target our most congested areas. For example, we are constructing new capacity express lanes along large stretches of I-75 and 575. We are also extending the managed lanes on I-85. Over the next four years, we will open to traffic more than $1.1 billion dollars' worth of new, reliable interstate lanes in Metro Atlanta, the largest interstate expansion since the 1980s.

We are making further progress in the form of our I-285/GA-400 interchange, which will ease congestion for hundreds of thousands of travelers each day. Let us not forget those things we have already accomplished, including the removal of the tolls on GA 400 and the opening of the I-85/GA 400 connector ramps, which many in our state are already using. And of course, we continue to construct the Jimmy Deloach Parkway extension, the Fall Line Freeway and other road improvements connecting South Georgia cities.

At the same time, other important projects lack the funding necessary to proceed. This brings me to our next option. Plan C—a transportation plan to which this General Assembly and I can agree that would address the ongoing needs of maintenance and repair, as well as freight corridor and other transportation improvements. I believe this is something that can and should be accomplished.

A need does exist. The excise tax, which is a per gallon flat fee, has remained the same since 1971. That's 44 years. In that time, the fuel efficiency for the average vehicle has almost doubled, which means the amount of excise tax collected for each mile driven has roughly been cut in half. And the federal government has mandated new standards that would again double the miles per gallon for the average vehicle over the next 10 years, meaning that the amount of excise tax collected for every mile traveled will continue to shrink every year. And that doesn't even account for inflation. In 2014 dollars, we collected approximately 17 percent less in state Motor Fuel Funds per capita for transportation than we did a quarter of a century ago, in part because of greater fuel efficiency. At the same time, we now have millions more people travelling on our roads. According to industry experts, simply maintaining what we currently have on our roadways requires a minimum of hundreds of millions of dollars in new revenue each year. Some industry experts even suggest it's more than $1 billion a year.

Over the years, we have added more highway to monitor, patrol and repair. In addition, our state has seen significantly more freight on our roadways, with more and more goods and raw materials entering through the Port of Savannah. We're already the second busiest container port on the East Coast, and we're getting busier. It's estimated that truck traffic out of the port will increase by 50 percent in less than 10 years. We have to be ready to meet that need.

Without Plan C, a new strategy for transportation investment, we will be forced to go to Plan D, which is to do nothing. If that is our plan, then our roads will slowly slip into disrepair, the safety of our citizens will be jeopardized, and our economy will be stagnated by increased congestion. That is unacceptable.

We are currently operating at a rate that requires over 50 years to resurface every state road in Georgia. If your road is paved when you graduate high school, by the time it is paved again you will be eligible for Social Security. We must increase the percentage of roads being resurfaced annually. With only current funding levels, new capital projects will have to wait as we tend to our existing transportation network. If we do nothing, we would continue to have to depend on the federal government, whose transportation funds are also dwindling. If we should choose not to maintain and improve our infrastructure, economic development would stall, companies would be unable to conduct their business efficiently, commuters would waste more time and gas sitting in traffic, and no one would be satisfied.

For those of you who believe as I do that there are certain powers left to the states and their citizens—a principal set forth in our nation's 10th Amendment—here is one way we can put our belief into practice. If we become less dependent on federal revenue for our transportation projects in Georgia, we will avoid the regulations and extra costs associated with federal involvement; we will get more for our money in new roads; and it will be one of the best signals that the state of Georgia is willing to spend our money to solve our problems. Four years ago, we decided that our state needed to develop its own reservoirs to be less dependent on federal water resources. Maybe it's time we apply that same logic to transportation.

We must maintain and improve our roads and bridges; we must provide congestion relief; and we must prepare for more freight and more businesses. We can debate how much it will cost to do something; but let us not forget how much it will cost to do nothing.

I do not believe that we Georgians will choose to do nothing. We know the problems; let's now resolve to agree on the solutions. That's the outlook we must embrace as we tackle all of the challenges we have discussed today. The sea is indeed vast, but our ten million oars row onward. Let us as the leaders of this state demonstrate that we can row together in sequence so that our boat will move steadily forward on a charted course of progress, with the shoreline of Promise and Prosperity on the horizon.

I pray for wisdom for all of us as we carry out the public's trust, so that we can give Georgians a state that's even better tomorrow than it is today. May God bless you and may God continue to bless the state of Georgia.